Ten Bleeding-Edge Open Source Companies: Page 3

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3. Digium

Location: Huntsville, AL

Founded: 1999 (as Linux Support Services)

Product or Service: Founder and CTO Mark Spencer developed the open-source VoIP PBX software that became Asterisk. Asterisk supports a range of TDM protocols for the handling and transmission of voice over traditional telephony interfaces. It features VoIP packet protocols, such as SIP and IAX, and it supports U.S. and European standard signaling types used in business phone systems. It can serve as a bridge between next-generation integrated voice and data networks and existing infrastructure.

Used in combination with Digium’s telephony interface cards, Asterisk is an open-source alternative for voice and data transport over IP, TDM, switched and Ethernet architectures. Digium’s additional telephony offerings include the standard business-class features, including conferencing, voicemail, voice menus, and IVR. More advanced features include dynamic content creation, speech recognition, and text-to-speech.

The company will release a VoIP PBX appliance that runs on Asterisk this quarter. Intended for SMBs and branch offices, Asterisk Appliance will support up to 50 users.

According to Digium, over two million users have downloaded and deployed Asterisk. Customers of the company’s supported, professional version include Aheeva, Wallstreet Electronica, PlatinumTel, and the University of Pennsylvania.

Funding: Closed its first VC funding in August 2006, a $13.8 million investment from Matrix Partners.

Competitive Landscape: How do you even begin to assess the market for enterprise-class VoIP software and services and IP PBX equipment? Let’s just say it’s huge and will only continue to grow.

Analyst numbers vary, but they all trend steeply upwards. Infonetics, for instance, reported that the IP PBX market grew 18% in 2006, with IP PBX equipment buoying the overall enterprise telephony market, which itself grew 9% in 2006, reaching $8.9 billion worldwide.

A few research firms caution against the hype, however. Most notably, Forrester’s report “U.S. Enterprise-Class VoIP Services, Q1 2007” argues that suppliers are over-hyping their offerings and that customers aren’t yet sold. Enterprises are moving cautiously towards an all-IP infrastructure because they don’t yet understand the benefits, nor do they know what services carriers will provide down the road.

Deciphering who fits where in this market is best done with a divining rod. Figuring out direct, head-to-head competition is even fuzzier, as most vendors are broadening their portfolios and even indirect competition poses a serious threat. For instance, Digium doesn’t directly compete with hosted VoIP service providers – or does it? What about voice-data convergence? Support for legacy circuit-switched products? We could go on and on.

Anyway, players in this space are many, including hosted providers like 8x8, Covad Communications, M5 Networks, and XO Communications. Equipment vendors include the likes of Alcatel, Nortel, Cisco and Avaya. Carriers will start to figure out the space eventually and target it. Mobile services will evolve and factor into this market too, and then there are the Skypes and Vonages of the world, which don’t have much enterprise-class impact in the U.S. yet, although Skype is already widely used as a business tool in the EU where users simply want to avoid roaming issues.

Management Team: Mark Spencer, chairman and CTO, founded the company in 1999 as a Linux support provider. Spencer led the development of several Linux-based open source applications, including the Asterisk Open Source PBX and Gaim Instant Messenger. Danny J. Windham, CEO, was formerly president, COO and director of ADTRAN; Steve Harvey, VP of worldwide sales, was previously VP of channel sales and competitive service providers for ADTRAN; Bill Miller, VP of product management and marketing, previously led voice product management at 3Com.

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